In 2005 a three-way partnership was formed between Nelson City Council (landfill operator), Nelson Marlborough District Health Board (end user of the renewable energy) and Pioneer Energy (owner/ operator of the gas treatment and delivery system and the boiler). A 2.0MW capacity landfill gas boiler was installed at the Nelson Hospital which produces over 60% of the hospital’s thermal energy demand for heating, hot water and steam. The operation utilises gas that is piped from York Valley landfill, which is used to fire the hospital boiler. A long-term contract was signed providing Pioneer Energy exclusive rights to sell the steam to Nelson Hospital in a cost-effective arrangement that also reduced the hospital’s fossil fuel usage and carbon footprint by 3,300 tonnes of CO2 each year. 

The benefits to the Nelson City Council included a:

• Practical and strategic use for more of its landfill gas (a valuable energy source) that was previously flared at the York Valley landfill.

• Long-term revenue stream for the landfill gas.

• Boost to the Council’s efforts to reduce local air pollution, which is a significant public health issue, and to meet tighter clean air standards.

At the time, it was considered an innovative solution that met both environmental and financial needs of Nelson City Council and Nelson Hospital.

After a robust due diligence process, September 2022 NTRLBU purchased the gas management contract and boiler from Pioneer Energy. Ownership of the contract removed both a significant constraint and provided important gains by enabling NTRLBU to capture and destruct gas, and, ideally, to reuse the gas. As only a portion of the gas captured was on-sold to Te Whatu Ora – Nelson Marlborough (formerly the NMDHB), there was no control over the emissions and lost opportunities for reuse. As a consequence, the purchase reduces both the actual emissions and the ETS liability.

It is estimated that there is approximately 2 million m3 per year gas being flared at York Valley and around 900,000 m3 per year being flared at Eves Valley. This gas has a significant energy content that culd be used for economic activities (such as electricity generation) or community benefit (such as heating hot pools), and would also reduce the greenhouse gas emissions if it was used to displace fossil fuels. The Joint Committee approved further investigations to be undertaken to evaluate most cost-effective and beneficial options.

Prior to the formation of the NTRLBU, Nelson Marlborough District Health Board initiated a study into the hospital’s potential use of landfill gas with the support of the Nelson City Council. The initiative was designed to provide a strategic and valuable use for the landfill gas, enabling the hospital to reduce coal consumption and in turn, reduce emissions, cut energy costs and reduce environmental impacts.